Spot iron ore offers remained firm even as investors spurned higher risk commodity assets after the government took steps to manage liquidity in the country.
Worries that China may no longer be keen on easing its monetary policy as it heads off signs of growing risks in its financial and banking system dampened sentiment toward commodities and equities, traders said.
China took aggressive steps on Wednesday, including unveiling detailed rules to curb peer-to-peer lending and intervening in its money markets.
The government also urged banks to increase the length of time of their loans after concerns about short-term borrowing could be leading to asset bubbles.
The outlook for steel prices remains bright, with sentiment supported by China's sustained steps to tackle overcapacity, traders said.
The government has promised to cut steel capacity by 45 million tons this year and has achieved 47% of that target by end-July, sources said.
With steel margins supported by firmer prices, there should be sustained appetite for iron ore, particularly for imported cargoes as domestic production is limited, the trader said.
"Mills are also looking for high-grade material to boost their steel production," he added.
Iron ore for delivery to China's Tianjin Port stood at $62 a ton.
Following are prevailing international prices:
Grade % Fe |
Origin |
Product |
load port |
destination |
August 25, 2016: cfr ($/ton) |
August 24, 2016: cfr ($/ton) |
August 23, 2016: cfr ($/ton) |
August 22, 2016: cfr ($/ton) |
63.5/63 |
India |
Fines |
Vizag |
Qingdao |
62 |
61 |
61 |
61 |
62 |
India |
Fines |
FOB Vizag |
|
32 |
31 |
31 |
31 |
62 |
Australia |
PB |
Dampier |
Tianjin |
62 |
61 |
61 |
61 |
63.5 |
Brazil |
Fines |
Brazil |
China |
64 |
63 |
63 |
63 |
Source: Traders